Changing a corporate culture
ONE DAY I was called by the Managing Director of our company. A jolly old chap, pleasant to work with, he looked at me with a serious mien. He started with his clipped British accent: “I think we got a problem, Noli. There seems to be a creeping complacency among our staff. They know that we earned oodles of money without so much effort. How can we change their attitudes?”
I was new in the company, hardly warmed up my seat. I came from an American company that was distressed. Frugality was the order of the day. Even our Christmas party was very spartan. I was in for a culture shock when I joined this British affiliated company. It was in a festive mode. There were parties galore almost every week somewhere in the workplace. Parties whether for Christmas, company anniversary, or loyalty day were lavish, held in 5-star hotels with expensive, well-known local artists as entertainers.
The industry we were in was an oligopoly. There were only three major players and we were one of them. Sales-wise, our company almost always ranked number one. There was not much pressure for the employees to work harder. In terms of dollar income, we were cited by the BSP as one of the top ten dollar earners of the country. Everything was nice and rosy. And people were happy.
It suddenly occurred to me that my boss wanted a cultural change. We retained an outside consultant to facilitate our brainstorming session. Our whole senior management team with two members of the board went to Caylabne Bay, a then exclusive, snooty resort, far from the madding crowd.
Since ‘values’ is a primary component defining the culture of a company, the facilitator showed us a glossary of values to choose from. The task of the first day was to narrow down our choice to 10 core values to maintain the leading edge of our company. The debate on the choice was spirited and sometimes heated. As night was fast approaching, we finally reached a consensus in choosing the 10 core values.
On the second day, we were asked to narrow the 10 core values into 5. The debate was more frenzied, furious and intense. One colleague passionately defended his thesis that loyalty should be one of our cherished values. “An employee who has no loyalty does not deserve to stay in the company a minute longer.”
He was snowed down by my argument that if loyalty is manifested by seniority in the service that’s not a value that we should cherish. “A guy who worked in our company for 10 years or longer does not mean that he is loyal to us,” I argued. “It’s possible that he stays longer in the company because with his dire qualifications, he has nowhere else to go. He is locked in. Instead of leaving, he would rather coast along until his retirement and get the handsome pension benefits. Between a new guy who is a high flyer and one who is senior with a mediocre performance, I’d choose the former anytime.”
Finally, after a long day of tumultuous debate, we came out with the following values:
Excellence – in all that we do whether we are in sales or support services
Customer Focus – our salaries, benefits, bonuses, and other emoluments come from the customers. The company cannot continue to exist without a delighted customer who comes to make an order and comes again and again to buy our services
Teamwork – our strategies, goals and plans would not be achieved without working as a team
Integrity – we can thrive in our business without violating the Code of Ethics. We will have zero tolerance for dishonesty
Creativity – never be satisfied with what we are and how we are doing. Challenge the status quo. There must be a better way of doing things. Complacency is unacceptable.
Definition of Corporate Culture
Organizational culture is roughly defined as the sum of its shared values, norms and behavior. These shared values have a strong influence on the people in the organization and dictate how they dress, act, and perform their jobs. A company’s culture will be reflected in its dress code, business hours, office setup, employee benefits, turnover, hiring decisions, customer dealings, client satisfaction and every other aspect of operations. Explaining one’s culture is like saying, “This is how we do it here.”
Value is taken from the Latin, “valere” or old French word, “valoir” which means worth or strength. It makes one company unique and distinct from others. Unilab’s culture of Bayanihan, for instance, makes it an identifiable brand of the company. My former company, General Motors’ (GM) dress code of gray flannel suit makes it distinct from Apple’s casual jeans.
My official visit at GM’s HQ in Detroit showed me its distinct culture – in sharp contrast with the Japanese – of rank classification even in the dining place. There was a separate cafeteria for the R and F and Supervisors, another one for the Managers and Directors’ level. The top floor was reserved for the Vice Presidents and Group Presidents. The elegance of the top floor restaurant where the International VP for Personnel invited me to lunch was comparable with the opulent restaurants of 5-star hotels. Barring any clouds, the neighboring states of Illinois, Indiana, Ohio and portions of the Great Lakes were visible. This prompted a resigned maverick executive to write a pejorative book about the company, “On a Clear Day, You Can See General Motors.”
Cascading the Core Values
From our bruising but productive brainstorming sessions, we came out with a fresh mandate: communicate down to the lowest ranks and to our branches our 5 core values. Our company newsletter bannered the 5 core values. Focus group discussions centered on the core values and how to nourish and live with them. Our respective offices displayed in picture frames these chosen values. There was not only total awareness of these shared values but a determination to live by them.
Walking the Talk
We decided that it’s not enough to preach. We must practice what we preach. Role modeling was an effective approach in embedding these core values in the minds of our employees as part of our cultural change.
We stopped the “The Loyalty Night” where we used to honor in a lavish dinner cum entertainment those who have been in the 5, 10 or more years of service in the company. We retained the service pin, Chairman’s letter and the cash loyalty award. In its place, we had the “The Achievers’ Night” where we recognized and honored those adjudged to have done excellent service to the company.
Putting flesh and meaning to the value of integrity, we punished with outright dismissal those who violated our Code of Ethics and those who tinkered with company money or property. In our Go for Improvement program, we gave incentive awards to those who submitted worthwhile innovative ideas that improve productivity, customer service or sales. Those are some examples of how we practiced what we preached.
Lessons Learned from the Cultural Change Process
One cannot change culture without being initiated or at least supported by top management. The CEO holds the key to its success. Better still if it is sanctioned by the board of directors. A culture must be aligned with the company’s vision and mission. A compelling mission statement like ‘a company of choice in the health care services’ could galvanize its leaders into a purposeful action to make it a reality.
A company’s chosen values are the core of its culture. While a vision articulates a company’s purpose, values offer a set of guidelines on the behaviors and mindsets needed to achieve that vision. These set of values must be clearly articulated & prominently communicated to all.
Of course, values are nothing unless translated into practice. If an organization professes integrity, its leaders must be the paragon of honesty, transparency and accountability. If excellence is one of its core values, it must not allow mediocrity and sloppiness in the work of its employees.
The success of the cultural change can be evidenced by the improved change in the bottom line results. Improved revenues and net income are the ultimate yardsticks of its success.
Finally, cultural change will not happen without the people accepting the core values as the guiding basis for their behaviors.
(The author is Chairman of Change Management International, Inc., a management consultancy firm. Past president of PMAP & SOF and currently Vice-President of ECOP, he is a member of the Tripartite Industrial Peace Council (TIPC), Tripartite Executive Committee (TEC) and a Commissioner of the Tripartite Voluntary Arbitration Advisory Council (TVAAC). He is author of book, “Human Resources Management – From the Practitioner’s Point of View.” His email address is: [email protected])
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